Economists from a variety of universities and think tanks have written to the prime minister, dismissing his claims of salary increases fueling inflation
Image: Anadolu Agency via Getty Images)
Many leading economists today accuse Boris Johnson of waging “the wrong fight” against workers demanding wage increases in the cost-of-living crisis.
Grafters are seeing their real incomes collapse amid rising inflation, which currently stands at 9% and is expected to reach 11% later this year.
Skyrocketing prices have triggered growing demands for higher wages.
However, the PM has claimed an economic crisis could develop if pay continues to track price increases.
Get a political briefing straight to your inbox every morning. Sign up for the free Mirror Politics newsletter
He said last week: “When a wage-price spiral starts, there is only one remedy and that is to curb rising prices with higher interest rates.”
south wales echo)
But 65 top economists today tell the PM he’s wrong.
In a letter seen exclusively by the Mirror, they tell Mr Johnson: “The suppression of wages is the polar opposite of what is needed in response to this current wave of inflation and risks a dramatic rise in poverty and deprivation and ultimately a Recession.
“Inflation today is coming from huge external factors, including aftershocks from lockdowns, war in Ukraine and extreme weather events around the world.
“It is not the product of domestic wage demands.”
The 389-word letter is signed by a variety of academics, including professors from Oxford University; Brown University in Rhode Island, USA and Friborg University, Switzerland.
They were joined by leaders from the autonomy, the New Economics Foundation and the Economic Change Unit.
The letter continued: “The Bank of England has made it clear that labor market pressures represent only a fraction of the price hikes we have seen in recent months.
“There is no ‘wage-price spiral’ in the UK.
“In fact, wage growth has lagged far behind price increases.
“By targeting workers who are demanding wage increases in the face of sharp increases in food and fuel costs, the government is waging the wrong fight.”
University of Greenwich economics professor Ozlem Onaran said: “Workers’ wage increases are not causing inflation, and asking workers to pay for the cost-of-living crisis by capping their wage demands only deepens the crisis.
“After a decade of wage tightening, we need to change course with a higher minimum wage, public sector wage increases, strengthening social security and strengthening unions to negotiate decent wage increases for all workers.”
The full letter to Boris Johnson
Dear Prime Minister,
We are writing after your recent speech in Blackpool, in which you warned of the dangers of a “wage-price spiral” and argued that wages should therefore not rise to keep up with rising prices.
As economists and economic policy experts, we believe that lowering wages is precisely the opposite of what is needed in response to this current wave of inflation and risks causing a dramatic increase in poverty and deprivation, and ultimately to a recession is coming.
Today’s inflation is being driven by huge external factors, including the aftershocks of lockdowns, war in Ukraine, and extreme weather events around the world.
It is not the product of domestic wage demands.
The Bank of England has made it clear that labor market pressures represent only a fraction of the price increases we have seen in recent months.
There is no “wage-price spiral” in Great Britain. In fact, wage growth has lagged far behind price increases.
By targeting workers who are demanding wage increases in the face of soaring food and fuel costs, the government is fighting the wrong battle.
Workers have experienced stagnant real wages for more than a decade, which has depressed living standards and led to a huge increase in in-work poverty.
Soaring price increases for basic necessities, from food to energy to apartment rents, come on top of a decade of exceptionally low wage growth.
In this scenario, blaming workers for rising inflation is perverse.
In fact, the greater risk is that incomes will grow too slowly, entrenching poverty and pushing more families to the brink of misery, while at the same time further eroding demand in the economy and plunging the country into recession.
We therefore urge you to urgently take additional measures to support living standards by committing to significant increases in the minimum wage, public sector salaries and Social Security payments.
Rather than asking ordinary people to shoulder the cost of dealing with the inflationary crisis, the government should focus on tackling the real causes of the crisis and using all the tools at its disposal to keep energy costs down, curb excess profits and to solve the blockade worldwide supply chains.
Making ordinary families poorer is a strategy that will only lead to more misery and amplify the effects of the current crisis.
- Christopher Cramer, Professor of Political Economy of Development, SOAS University of London
- Barbara Hariss-White, Professor Emeritus and Fellow, University of Oxford
- Judith Heyer, Emeritus Fellow, University of Oxford
- Susan Himmelweit, Professor Emeritus of Economics, Open University
- Suzanne J. Konzelmann, Professor of Economics, Birkbeck, University of London
- Simon Mohun, Professor Emeritus of Political Economy, Queen Mary University of London
- Richard Murphy, Professor of Accounting Practice, Sheffield University Management School
- Ozlem Onaran, Professor of Economics, University of Greenwich
- Carlos Oya, Professor of Political Economy of Development, SOAS University of London
- Kate Pickett, Professor of Epidemiology, University of York
- Sergio Rossi, Professor of Macroeconomics and Monetary Economics, University of Fribourg
- Diego Sanchez-Ancochea, Professor of Political Economy of Development, University of Oxford
- Pritam Singh, Professor Emeritus, Oxford Brookes Business School
- Guy Standing, Professorial Research Associate, SOAS University of London
- Cyrus Bina, Distinguished Research Professor of Economics, University of Minnesota
- Mark Blyth, Professor of International Economics, Brown University
- Guglielmo Forges Davanzati, Professor of Political Economy, University of Salento
- Jean Luc de Meulemeester, Professor of Economics and History of Economic Thought, Université Libre de Bruxelles
- David Tyfield, Professor of Sustainable Transitions and Political Economy, Lancaster University
- Mehmet Ugur, Professor of Economics and Institutions, University of Greenwich
- Carolina Alves, Joan Robinson Research Fellow in Heterodox Economics, University of Cambridge
- Mary-Paz Arrieta-Paredes, Lecturer, University of Greenwich
- Hannah Bargawi, Joint Head of Economics, SOAS University of London
- David Barlow, Lecturer in Economics, Newcastle University Business School
- Alberto Botta, Associate Professor of Economics, University of Greenwich
- Christine Cooper, Chair of Accounting and Director of Research, University of Edinburgh
- Sara Gorgoni, Associate Professor of Economics, University of Greenwich
- Alexander Guschanski, Lecturer in Economics, University of Greenwich
- Jason Hickel, Visiting Senior Fellow, London School of Economics
- Leslie Huckfield, Lecturer, Glasgow Caledonian University
- Neil Lancastle, Senior Lecturer, De Montfort University
- Stewart Lansley, Visiting Fellow, University of Bristol
- Jane Lethbridge, Associate Professor of Public Policy, University of Greenwich
- Sara Maioli, Lecturer in Economics, Newcastle University
- Imko Meyenburg, Lecturer in Economics and International Business, Anglia Ruskin University
- Jo Michell, Associate Professor of Economics, University of West England Bristol
- Maria Nikolaidi, Associate Professor of Economics, University of Greenwich
- Cem Oyvat, Lecturer in Economics, University of Greenwich
- Jeff Powell, Lecturer in Economics, University of Greenwich
- Lucia Pradella, Lecturer in International Political Economy, King’s College London
- Kobil Ruziev, Deputy Head of Department, University of West England Bristol
- Josh Ryan-Collins, Associate Professor of Economics and Finance, University College London
- Navjot Sangwan, Lecturer in Economics, University of Greenwich
- Luca Tasciotti, Lecturer in Economics, University of Greenwich
- Elisa Van Waeyenberge, Lecturer, SOAS University of London
- Rafael Wildauer, Lecturer in Economics, University of Greenwich
- Yuliya Yurchenko, Political Economist, University of Greenwich
- Patrick Allen, Chair, Progressive Economy Forum
- Christine Berry, independent researcher,
- Fran Boait, Managing Director, Positive Money
- Sarah-Jayne Clifton, Executive Director of the Department of Economic Change
- Miatta Fahnbulleh, Executive Director, New Economics Foundation
- Lucy Findlay, General Manager, Social Enterprise Mark Company CIC
- Katie Gallogly-Swan, Economics Officer, UNCTAD
- Níall Glynn, founder of the Working Class Economists Group
- Joe Guinan, Vice President, The Democracy Collaborative
- Lukas Hardt, Head of Policy and Engagement, Wellbeing Economy Alliance Scotland
- Paul Hebden, Acting Executive Director, Tax Justice UK
- Luke Hildyard, Director, High Pay Center
- Mathew Lawrence, Director, Common Wealth
- James Meadway, Director, Progressive Economy Forum
- Howard Reed, Director, Landman Economics
- Sara Reis, Deputy Director and Head of Research and Policy, UK Women’s Budget Group
- Mary-Ann Stephenson, Director of the Women’s Budget Group
- Gary Stephenson, independent economist,
- Will Stronge, Director, Autonomy
- Geoff Tily, Senior Economist, Trades Union Congress
https://www.mirror.co.uk/news/politics/boris-johnson-accused-fighting-wrong-27252641 Economists blast Boris Johnson for 'suppressing' Brits' wages while inflation soars